In crosshairs of U.S. Congress, Facebook’s Zuckerberg concedes regulation of internet economy ‘inevitable’

Facebook CEO Mark Zuckerberg dodged questions about the company’s profitable business model in his testimony at the hearing on April 11, 2018.

Andrew Harnik/The Associated Press

Mark Zuckerberg appeared resigned to more government oversight of social-media companies after two days of testimony before the U.S. Congress, saying he saw regulation of the internet economy as “inevitable,” even as he refused to offer lawmakers a clear path forward.

Mr. Zuckerberg was called to testify before Congress to defend Facebook Inc. after revelations that British political consulting firm Cambridge Analytica misused the personal information of more than 87 million Facebook users, including data belonging to the chief executive himself.

“The internet is growing in importance around the world in people’s lives, and I think that it is inevitable that there will need to be some regulation,” the Facebook CEO told a House of Representatives committee toward the end of his first visit to Capitol Hill.

The statement, in front of a televised meeting of Congress, is a sharp turnaround from a little more than a year ago, when the tech billionaire dismissed as “crazy” the idea that his social-media platform could have been used by foreign actors to influence the outcome of the 2016 U.S. presidential election.

But after nearly nine hours of gruelling congressional testimony, it seems clear that Mr. Zuckerberg – and much of Silicon Valley – is now in the crosshairs of U.S. lawmakers.

Facebook CEO Mark Zuckerberg says he believes it is "inevitable" that there will be regulation of his industry.The Associated Press

Exactly what that regulation will look like is still up for debate. Many members of Congress struggled in their questions to grapple with how Facebook’s data-collection technologies operate, issues that are key to crafting legislation to rein in the tech industry.

“What exactly is Facebook? Social platform? Data company? Advertising company? A media company? A common carrier in the information age? All of the above? Or something else?” asked Greg Walden, the Oregon Republican who chairs the House energy and commerce committee.

Mr. Zuckerberg dodged such questions about Facebook’s profitable business model, saying he sees Facebook as a technology company but acknowledging that the social-media giant needs to take more responsibility for the content.

Even as he said he supported regulations, he urged lawmakers to tread lightly, endorsing many regulatory proposals “in principle,” but offering little in the way of concrete ideas of what legislation should look like.

Still, the controversy swirling around Facebook’s data-collection practices has sparked a turning point in the debate over online privacy in the United States, where lawmakers have long resisted placing restrictions on the growth of their country’s most innovative and globally dominant online players.

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“We’re going to have this interesting conversation that has not yet been answered, which is: ‘How do you regulate big-data analytics?’” said Nicol Turner-Lee, a fellow in the Brookings Institution’s Center for Technology Innovation. “What kind of principles should guide the use of algorithms and other big data that feeds itself into [artificial intelligence]?”

Several bills are now working through both the Senate and the House of Representatives that could usher in a new era of government scrutiny.

Facebook and Twitter have offered their support for the Honest Ads Act, which would require online political advertisements to conform to the same transparency standards as ads running in traditional media.

On Wednesday, U.S. President Donald Trump signed legislation that gives authorities powers to go after sites that facilitate sex-trafficking. Silicon Valley players had long fought the bill, which reduces their immunity under the Communications Decency Act, a 20-year-old law that shields internet companies from liability for content posted on their platforms.

Lawmakers pressed Mr. Zuckerberg to support the Balancing the Rights of Web Surfers Equally and Responsibly (BROWSER) Act, a bill that would require both internet-service providers and companies such as Facebook and Google to obtain explicit consent from users before sharing their personal information with third parties.

Congress has also focused attention on how U.S.-based companies such as Facebook should implement the European Union’s General Data Protection Regulation, which will create a sweeping set of digital privacy restrictions when it comes into effect next month.

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Most significantly, the Federal Trade Commission, Washington’s chief consumer protection watchdog, is looking into whether the Cambridge Analytica controversy is evidence that Facebook violated a 2011 settlement that placed limits on what the firm could do with users’ personal information without their consent.

The investigation could bring stiff financial penalties for Facebook of up to $40,000 for every violation each day. But some lawmakers want to give the commission even broader powers, including requiring online companies to report all potential data breaches to the federal watchdog.

“Who’s going to protect us from Facebook?” asked congresswoman Jan Schakowsky, a Democrat from Illinois.

Others are pushing for the agency to use its powers to break up tech monopolies. “The Facebook problem is a market power problem,” said Lina Khan, director of legal policy at the Open Markets Institute, a think tank that advocates for antitrust laws. “The hearings revealed that members of Congress are still coming around to recognize this reality, but the good news is the we already have a host of tools for fixing Facebook.”

That there is even any serious bipartisan discussion of internet regulation in Washington at all is an important shift.

After the 2016 election, many analysts held out slim hopes for meaningful regulation coming from the deeply divided Congress. But Facebook’s data-privacy issues have provided lawmakers with plenty of fuel for bipartisan outrage.

Democrats have lashed out at Facebook over revelations that Russian trolls had used fake accounts and advertisements on the platform to sow discord on hot-button issues such as immigration reform and race relations. News last month that an app developer had handed over personal information on tens of millions of Americans to Cambridge Analytica, which was working for the Trump campaign, has only widened the party’s rift with Silicon Valley.

Republicans in Congress, meanwhile, have repeatedly accused Mr. Zuckerberg of allowing Facebook to suppress conservative and religious views and questioned the tech executive on how former president Barack Obama’s 2012 re-election campaign used Facebook data to sway voters.

Even some of the country’s most anti-regulation lawmakers now seem to agree with Mr. Zuckerberg that new laws are inevitable.

“Congress is good at two things: doing nothing and overreacting,” Billy Long, a Republican congressman from Missouri warned the tech executive on Wednesday. “So far we’ve done nothing on Facebook … and we’re getting ready to overreact.”

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